"The business climate is amazing," marvels Chris Epstein, a
property developer in Charlotte, North Carolina. Officials are
either helpful or stay out of the way. And the living is sweet:
drivers don't honk, neighbours are kind and deals are often
sealed with a handshake. "It's like living in a loaf of Wonder
Bread," he chuckles.

North Carolina has long enjoyed a reputation as an easy-going,
business-friendly state. Warm weather, fine universities and a
low cost of living attract lots of migrants: its population grew
18.5% between 2000 and 2010, compared with 9.7% for America
overall. Yet the recession cost North Carolina around 340,000
jobs, not all of which have come back. The state tries hard to
recruit new businesses, but faces stiff competition from
neighboring South Carolina, Tennessee and Virginia.

When Pat McCrory (pictured) campaigned for governor in 2012,
North Carolina was eager for new blood. Twenty years of Democrats
in the governor's mansion had led to tax hikes, government bloat
and allegations of impropriety. Mr McCrory, a Republican former
mayor of Charlotte, promised to create jobs, shrink the state's
debt and improve North Carolina's "brand." He won the election
handily.

To appeal to businesses, the new governor swiftly began trimming
regulations and expanding vocational training in high schools. He
introduced a modified flat tax, which cuts personal rates up to
two percentage points to 5.8%, and cuts corporate tax rates to as
low as 3% by 2017. Critics carp that a flat tax shifts the burden
to poorer people, particularly as the changes--which took effect
in January--include a rise in some sales taxes and a repeal of
the Earned Income Tax Credit, which pads the wages of the working
poor.

The reforms will also reduce tax revenues by $2.4 billion over
the next five years, according to the state's Fiscal Research
Division. Mr McCrory disputes this: "If I get more people to work
we'll have more money," he says.

From a peak of 11.3% in January 2010, the state's unemployment
rate fell to 6.7% in January this year. Conservatives crow that
cuts to jobless benefits have spurred people to find work. North
Carolina has added a net 70,000 jobs since last January,
according to the state's Division of Employment Security, and the
national recovery is starting to buoy the state's manufacturers.

However, the jobless rate has also fallen because many people
have given up looking, and so are no longer counted.

After a year in office, the governor's approval rating is around
40%, with 47% of voters disapproving of the job he is doing,
according to Public Policy Polling (PPP), a firm based in
Raleigh.

He has been hurt by some ineptitude at the Department of Health
and Human Services, which has bungled programmes for Medicaid and
food stamps. And he has been struggling to manage a crisis with
Duke Energy, the state's main electricity supplier, which spilled
around 35m gallons of toxic coal ash into the Dan River earlier
this year, threatening drinking water and aquatic life. Given Mr
McCrory's push to cut red tape, the timing is awkward. It hardly
helps that he worked at Duke Energy for 29 years.

A bigger problem for him is that he has come to be seen as a
figurehead for an increasingly unpopular state legislature. The
2010 election gave the Republicans enough seats to control the
redistricting process, and in 2012 they took full charge of North
Carolina's state government for the first time in a century. The
party now enjoys a veto-proof "super-majority" in the General
Assembly, which means they can basically pass whatever laws they
want.

Unlike the pragmatic conservatives who have long dominated state
politics, the Republicans now in charge are culture warriors.
Their priorities ensured that Mr McCrory's first year in office
was contentious. The governor found himself signing laws to ban
sharia (Islamic law), restrict abortion and introduce strict
voter-identification rules, which are being challenged by the
federal government.

Public approval for the General Assembly has fallen to 17%,
according to PPP. Some worry that a lack of discipline among
hardline Republicans will hurt the state's reputation for
moderation. The lurch to the right has provoked protests from a
progressive "Moral Monday" movement, led by local pastors, which
had its largest-ever rally in Raleigh in February. Unaffiliated
voters have become the fastest-growing electoral group in the
state, and they are likely to outnumber registered Republicans in
most counties by 2016, say Morgan Jackson and Paul Shumaker, two
political consultants.

The governor is no ideologue. "Listen, I've stepped on toes of
both liberals and conservatives," he insists. Yet Mr McCrory
seems unable to rein in his party and frustrate unpopular laws.
The legislature's power to override his veto can leave him
looking foolish, as he did when two vetoes were quashed last
year.

Several Democratic candidates have already announced that they
will be running for governor in 2016. "They smell blood in the
water," says Rob Christensen, a columnist at the News and
Observer, a local paper. State lawmakers in safe seats can afford
to be out of touch with the electorate. Governors are not so
lucky.